Why did the automatic stabilizers have more of an effect on our economy during the Eisenhower presidency than they did during the 1930s when Roosevelt was president?
A) We had shifted from an agricultural economy to an industrial economy.
B) We had learned more about controlling inflation and unemployment, so less adjustment was needed.
C) As the classical economists predicted, inflation and unemployment had begun to balance each other out.
D) The size of the federal government had increased dramatically since the 1930s.
E) In reality, the opposite is true; the automatic stabilizers had a greater impact in the 1930s than in the 1950s.

Question

Quizplus · Accepted Answer

The size of the federal government had increased dramatically since the 1930s, which meant that automatic stabilizers such as progressive taxes and welfare programs had a larger base to work from and could have a more significant impact on the economy during downturns.

Why Did the Automatic Stabilizers Have More of an Effect